A few recommendations for buying commercial space in Noida that will not only guide, but make sure that you achieve success in the commercial real estate market. An important tip with this regard is that you prepare yourself by adjusting your perspective to a high level of patience. The real estate market for purchasing houses is vastly different in terms of time and financial investment.
Time will be required to conduct a significant amount of research to ensure that your deal goes well. Prepare to invest not only money, but considerable effort in developing a network of relationships with brokers, lenders, buyers and investors.
Start with the following recommendations…
1) First accept that this is not the same as buying residential property. Residential property in India is legally defined as “property used, or intended to be used, exclusively or principally for residential purposes”. i.e., houses, townhouses or apartments. You can live in the property yourself, or you can rent it out and enjoy rental income. Commercial property is property that is used for various non-residential activities: offices, retail shops, industrial buildings, public facilities, hotels, etc. Similar to residential property, you can operate your business from your commercial property, or you can lease it to one or multiple tenants. Most businesses prefer to rent rather than own the property they operate their business from, so the commercial property market is a large investment market. Suspend all of your preconceived ideas about real estate. Now you’re ready.
2) Learn to develop good relationships that will be crucial as you develop your skills and your knowledge base with other investors, private lenders, appraisers and inspectors.
Decide which commercial property you want to invest in, industrial, office buildings, retail space, etc. What to look for? Identify which of the above-mentioned property suits your business purpose and plan to invest accordingly:
Buy & Self-use: There are many benefits that comes with self-use of property, chief among which is savings on rentals. Apart from this another benefit is value appreciation.
Buy & Lease: Besides achieving long term value appreciation another reason why people invest in commercial real estate is – Regular income. However, being a property owner requires building a temperament — for handling possible disputes & legal issues, managing tenants, repair work, etc.
Buy & Sell (Short-term): then there are people who want to book quick profits, which can be achieved by investing in under construction properties and selling at mediocre profits once they are ready for possession.
Buy & Sell (Long-term): Large intrinsic value appreciation over a long period; a solution for long-term aims like retirement planning, child’s education, etc.
3) Expand your knowledge and be willing to learn something new about formulas and terminology such as Net Operating Income and Capitalization Rates. Being familiar with what the current trends are for the investment area you are getting into; which will prove to be of great value when making offers.
4) Get prepared to make a sizeable down payment. The down payments in commercial real estate is usually a higher than in residential real estate.
5) Screen and canvas the area to get to know the local circumstances of the market you are exploring for specific things like the employment rate, local property taxes, city ordinances, and landlord laws as it applies to you.
6) Get appraisals, property inspections, and other tests and inspections required by law.
7) Associate with experienced commercial investors who can answer questions that come up while you are evaluating properties.
8) Practice patience with the entire process because commercial real estate property deals take longer than purchasing a single home to negotiate, renovate, and sell.
9) Build your connections and utilize a team of qualified professionals in your chosen market, even if you are thousands of miles away.
Commercial deals are not to be seen as quick cash generators like flipping houses, see the investment as a way to build for your retirement and your future.
Choosing to invest your hard-earned money with a reputed builder could save you from potential market risks and better investment in the market, which could help to give you a feeling or being more in control.